Property taxes will have to skyrocket to compensate for the lost tax revenue in many cities. Whether we like to admit it or not, the infrastructure costs are a shared cost and if we lose a lot of commercial tax revenue that was indirectly gathered from residents, it will have to be gathered directly from residents.
Increased property taxes will push people on the margins out and compound the issue while also decreasing real-estate value.
You’re trying to scare people into thinking another real estate crisis on the scale of 2008/2009 is looming. Stop. The commercial real estate market is a fraction of the residential real estate market.
Further, actual local businesses in communities are benefiting from WFH workers.
I didn’t say that. I don’t see how businesses in these commercial areas do not suffer, and I don’t see how that does not translate into job losses, and I don’t see how this combination does not result in lost tax revenue.
WFH likely means people spend less on gas and eating out. This is one of the benefits touted by WFH proponents, myself included. I am spending at least $300 less a month since WFH.
Yes I’m certain some tax revenue shifted to the city I live in, but it definitely shifted away from the city my office was in.
This is the sentiment I hear from my circles. While remote work is great for finding top talent and all (productivity arguments aside). The commercial real estate market is essentially Wile-E-Coyote running in air after running off the cliff.
Converting modern office buildings to residential can be difficult because commercial buildings often have more interior (windowless) space and we insist (often by law) that bedrooms have windows. Sometimes it can be done, depending on the building’s shape, but “wasted” interior space can be a big financial loss, which is essentially about acknowledging that the building isn’t as useful as people expected. (Though I’m sure some use could be found for the space.)
Charles Munger tried to do it differently with beds on the inside, but this is unpopular [1].
One reason that companies go for an open design is to get more natural light into the interior, which makes for a good first impression, but has other downsides like noise. (Sometimes homes don’t have enough rooms with doors either.)
Not only commerical real estate but the adjacent businesses that depended upon that traffic, and the shortfall in tax revenue cities / counties were getting from that activity.
Oh well. It's not like you have the right to recoup or profit from buying a house. You paid what it was worth to live there at the time. It's a place to live, not a stock.
reply